The 2010 Chilean Mining Rescue (A)

9-612-046 REV: OCTOBER 8, 2014 AMY C. EDMONDSON FAAIZA RASHID HERMAN (“DUTCH”) LEO NARD The 2010 Chilean Mining Rescue (A) On August 5, 2010, 700,000 tons of some of the hardest rock in the world collapsed in Chile’s century-old San José mine. The collapse buried 33 miners at a depth almost twice the height of the Empire State Building—over 600 meters (2,000 feet) below ground. Never had a recovery been attempted at such depths, let alone in the face of challenges like those posed by the San José mine: unstable terrain, rock so hard it defied ordinary drill bits, severely limited time, and the potentially incapacitating fear that plagued the buried miners. Could the trapped miners and rescue workers mobilize before air and resources were depleted? The ensuing efforts would draw the attention and resources of countless people in Chile and around the world—and theirs would become a story of human survival, ingenuity, and hope facing the most desperate of circumstances. The Mining Industry of Chile With volcanoes, glaciers, deserts, and an immense continental mountain range, the geographically varied country of Chile extends along more than half of the Pacific coast of South America. Often referred to as the mining capital of the world, Chile was the world’s largest producer of copper, accounting in 2009 for about 35% of the world’s copper production. Copper was also a pillar of Chile’s economy, contributing 14.4% of the country’s GDP in 2010.1 Much of Chilean copper production lay in the hands of international investors until the 1950s, when the Chilean government, under President Carlos Ibáñez del Campo, initiated a nationalization process that succeeding governments continued. Through negotiations with foreign investors, the government gradually acquired control of Chile’s largest copper mines. Even after General Augusto Pinochet’s junta seized control of the government in 1973 and began to implement reforms that favored the free market, the mines remained in government possession.2 Codelco The National Copper Corporation of Chile (known by its Spanish acronym, Codelco) was established in 1976. With control of Chile’s largest mines, Codelco became the largest copper- producing company in the world and in 2010 accounted for 12.5% of total global copper production.3 With annual revenues of over US$12 billion in 2009 alone, Codelco also constituted a major source of income for the Chilean government, which played a key role in the company’s foremost decisions. The president of Chile appointed Codelco’s board of directors, and Codelco’s president was Chile’s ________________________________________________________________________________________________________________ Professor Amy C. Edmondson, doctoral student Faaiza Rashid, and Professor Herman "Dutch" Leonard prepared this case. HBS cases are developed solely as the basis for class discussion. Cases are not intended to serve as endorsements, sources of primary data, or illustrations of effective or ineffective management. Copyright © 2011, 2012, 2014 President and Fellows of Harvard College. To order copies or request permission to reproduce materials, call 1- 800-545-7685, write Harvard Business School Publishing, Boston, MA 02163, or go to www.hbsp.harvard.edu/educators. This publication may not be digitized, photocopied, or otherwise reproduced, posted, or transmitted, without the permission of Harvard Business School. This document is authorized for use only in Dana Born©s Senior Executive Fellows (SEF) course at John F. Kennedy School of Government, from April 2017 to October 2017. 612-046 The 2010 Chilean Mining Rescue (A) Minister of Mining.4 Shortly after the San José mining accident in August 2010, Chilean President Sebastian Piñera placed Codelco in charge of the response. Despite the dominant size of Codelco, many of the world’s private mining companies (including Canada’s Barrick Gold Corporation, the United Kingdom’s Antofagasta plc, BHP Billiton of Australia and the United Kingdom, and Phelps Dodge Corporation of the United States) remained major investors in Chile’s mining sector. In 2010, the Escondida mine, with a 57% controlling ownership interest by BHP Billiton,5 produced about 7% of global copper production, making it the world’s largest single-mine producer of copper.6 Many of these private companies would self-mobilize their resources in the wake of the 2010 mining accident. Safety Practices With an industry average of 34 deaths per year since 20007 and countless day-to-day injuries, work in Chilean mines was risky. It demanded employees to drive truckloads of mining explosives across an earthquake-prone region.8 Job-site safety practices, however, remained highly variable across mining companies in Chile, and a number of mines, such as the San José mine, were known for emphasizing production over safety.9 The San José Mine In 2010, Compañía Minera San Esteban Primera owned the San José mine. Located in the mineral- rich Atacama Region of Chile (see Exhibit 1), the San José mine had been operational since 1889.10 The inside of the mine included long, sloping tunnels that spiraled over 16 kilometers, reaching a depth of over 700 meters (see Exhibit 2). The mine produced roughly 2,700 kilograms of copper daily (US$22,000) and boasted gold reserves worth almost a billion dollars (at 2010 prices).11 In the last decade alone, accidents at the mine had repeatedly brought the operations under scrutiny. In 2007, the death of a geologist during a mine accident led to a total shutdown. Many safety procedures, however, remained negligent even after the mine was reopened in 2008.12 Outdated maps, missing escape ladders in ventilation shafts, and the absence of backup exits13 made the mine an extremely dangerous work site. One of the miners lost a leg in an accident in July 2010.14 Many miners at San José wondered why the mine had not already collapsed, given a century’s worth of disorganized dynamiting, drilling, and extractions that had diminished the mine’s support structure. Inside San José (as in most deep mines), hot, humid conditions were common, with temperatures usually over 32° Celsius (90° Fahrenheit). To avoid dehydration, miners drank an average of three liters of water daily. In addition, they had to dodge falling rocks and regularly flee from debris slides. Because of the dangerous work conditions, miners at San José were paid up to 30% more than the competitive wage.15 Buried Alive: The San José Cave-In Around 2 p.m. on August 5, 2010, a part of the San José mine collapsed, blocking the passage to the tunnels deep within the mine. The miners close to the entrance, although shaken by the deafening thump, emerged unscathed from the mine shortly thereafter. But a group of 33 miners working deeper within the mine were now buried some 700 meters underground with a 700,000-ton rock corked between them and the mine entrance. Trapped deeper than the height of many modern-day 2 This document is authorized for use only in Dana Born©s Senior Executive Fellows (SEF) course at John F. Kennedy School of Government, from April 2017 to October 2017. The 2010 Chilean Mining Rescue (A) 612-046 landmarks—the Statue of Liberty (93 meters), the Eiffel Tower (324 meters), and the Empire State Building (381 meters)—the miners were blinded by a thick cloud of dust. In spite of falling debris and a slippery tunnel floor (the cave-in had unleashed trapped water between rocks), the 33 miners managed to make their way to a 50-square-meter (540-square-foot) predesignated “refuge” within the mine. No one was critically injured or had broken any bones. The loud cracking sounds inside the mine, however, indicated that the ground was far from stable.16 The First 24 Hours Luis Urzúa, the 54-year-old shift foreman, immediately checked provisions in the refuge. He found two oxygen tanks, some expired medicine, and food—1 can of peaches, 1 can of salmon, 2 cans of peas, 4 cans of beans, 20 cans of tuna fish, 96 packets of crackers, 10 liters of water, 16 liters of milk, and 18 liters of juice—which could feed 10 miners for two days.17 Even-keeled and soft-spoken, Urzúa held formal leadership; in the Chilean mining culture the authority of the shift foreman was considered absolute. But Urzúa had worked at San José for less than three months and did not know the miners well. Soon arguments caused by fear, frustration, and anger erupted. Many miners had long predicted a cave-in and felt bitter and betrayed. Those with years of experience working at the mine felt frustrated by how little the company had done to safeguard them. One miner in particular, the energetic and charismatic 39-year-old Mario Sepúlveda, was galvanized. He felt that the miners must take action.18 Along with 63-year-old Mario Gómez, Sepúlveda rallied the miners to explore escape routes and send signals to the rescue workers. Sepúlveda’s appeals resonated with the miners, but most did not follow, staying in subgroups based on kinship and past friendships. Despite the mine’s instability, many ventured out of the refuge, either individually or in small groups. One miner, 27-year-old Richard Villarroel, drove a pickup truck upward through the tunnels until he came across a blockage. He stuffed the edges of the fallen rock with tires and oil filters and ignited them in hopes that the smoke would alert rescue workers. Others ignited dynamite at regular intervals to signal there was life underground. Urzúa, a topographer by training, stayed back to sketch a map of their surroundings and the mine.19 By the end of their first 24 hours, the miners were exhausted by failed attempts to communicate with the outside world and disoriented by lack of natural light.

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